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Adding Location To Loyalty Card Apps

There are obviously lots of different kinds of loyalty cards. I have somewhere between 10 and 20 cards ranging from Coffee Cards through to Airline Frequent Flyer Cards. I have so many I can’t carry them all in my wallet, which is unfortunate when I find myself in a position to use one. I do carry a Smartphone, so there are opportunities to carry apps. Many retail companies in New Zealand now have apps, mostly on iPhone and Android. They range from cafe’s and fast food companies to tourism and banks. Features include the ability to order food from a specific store, the ability to view the store on the map, make reservations and view points.

A lot of companies have had back on using Smartphone applications for loyalty programs on the basis that there are not enough people using them. At the last Social Media Club Auckland event one of the panel questions was what is the penetration of Smartphones in New Zealand. No one had an answer as the telco’s generally don’t want to share this competitive information. However in this month’s IT Brief there was a quote from Tony Baird of Vodafone saying that 66% of their mobile users now have Smartphones. That’s pretty high penetration and growing rapidly as is their data traffic which grew from 60TB in June last year to 135 TB in June this year. It would be reasonable to expect at least Telecom to be showing similar penetration.

So, in my last post I talked about a number of aspects of getting to know your customers. Given the statistics in the poll on my previous blog almost 70% of loyalty card holders do not specifically head to shop at a store where they have a loyalty card. In effect this says that the loyalty card in most cases is not attracting people to do business, or effectively be loyal to the retailer or group who invest a lot of time and money into the card systems in manufacture, distribution and all the other aspects of running a loyalty program.

What is missing? I believe that one aspect is not really understanding the customer. Let’s start simple. How do you get a loyalty card? Obviously it varies. Some cards like a coffee card are as simple as the retailer offering the card to a customer when they are in the store buying a coffee, the retailer invites them to start using a card, typically offering your 11th cup free. At the other end of the scale there are forms to fill out, which confidentially provides the company with significant information about the person. This may include:

  • Home address
  • Home and Mobile Phone numbers
  • Age
  • Household income
  • Interests
  • Family details e.g. single, married, children under or over a certain age
  • Occupation
  • Email address

In theory this enables the loyalty program to target information to the member and under strict Direct Marketing opt in guidelines, make offers to the members, which typically comes in the form of eDM’s and Direct Mail. The latter is a very expensive form of marketing as is normal advertising such as print, radio and TVC’s. For many industries and products this is tough business. How often do you buy a lawn mower, a TV or an iPhone? The marketing only works when you are open to buy. I recently purchased a new lawn mower, but it was the first one in over 10 years. If I had kept every lawn mower advertisement that arrived in my letter box trying to sell me one and looked at the creative, print and distribution costs, it might have been cheaper for them to give me a lawnmower. Of course all of this advertising is focussed on products that everyone is selling, there is very little focus on products that are unique. Everyone has a promotion on a printer, a TV, an iPhone which forces everyone to focus on price, heavy discounts and the consumer wins if they are looking for that product. Profits up the value chain are massively eroded through the competitive pricing and costs of marketing.

Data Mining and Business Intelligence are already used by some companies and very soon GeoSmart will be launching the much anticipated BIonaMAP we have discussed in many blogs in the past. This will allow companies to better understand their customers on the basis of the data provided, including the ability to view their customers and query their information in relation to the Department of Statistics mesh blocks and area units.

Canberra Income $100,000+

In this example we looked for   where the average household income in Canberra (yes we do Australia too) is equal to or greater than $100,000. If we were looking for loyalty members who had higher than average discretionary spending capability, this could be a very useful tool for target marketing. We could potentially make special offers by overlaying our loyalty card members in this SaaS (Software as a Service) application and then querying them from a combination of the information we have about them and the information the statistics department has about people in the area.

In the coming blogs I will get into more detail about what the implications are from the perspective of location, but like anything you need to start at the beginning and in many cases as I have outlined,  scatter gun marketing, throwing leaflets into letter boxes does not effectively target people who might change their behaviour in favour of your product or brand.

The key to loyalty is a relationship and this comes from engagement. You don’t engage well by putting something in someone’s letterbox. You engage by understanding who they are, what their needs are, when they are out and about and open to buy. As a retailer with a loyalty program you have huge amounts of information about your clients at your fingertips, which is untouched.

Here’s a simple example to finish this blog. Paper Plus not only supports Fly Buys, but they also have their own card called My Big Deal. They run promotions for people who use that card. Right now they have a sale on certain children’s books. If you buy the books using your loyalty card and they store that information, they now know (if they didn’t ask in their registration form) that you either have children or have a relationship with children, perhaps as a grandparent. So they know you buy children’s books. This is valuable information that you could take advantage of in your proximity based marketing application.

More on the location based aspect for apps is coming up, now that we have covered some basics. If this is of interest, please bookmark or subscribe. If you know of someone else who might be interested, why not send them a link? If you would like to discuss these concepts with us about your own business, please contact us.

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September 20, 2011 Posted by | Australia Maps, Business Analytics, Business Intelligence, Business Tools, Data Mining, Distribution, geosmart, GIS, iphone, location based services, Loyalty Card, Mapping Applications, Marketing, new zealand, new zealand maps, Print Advertising, proximity based marketing, Radio Advertising, Retail, Retail Profit, SaaS, territory management | , , , , , , , , , , , , , , , , , , , , , , | 1 Comment

Sead Latest in IT Seminar – Mobile Technology

A couple of weeks ago our Sales & Marketing Manager, Luigi Cappel had the privilege of presenting to a group of ICT professionals at the Mercure Hotel hosted by Sead I.T. People. The presentation in the series of Sead Latest in IT Seminar was on Mobile Marketing.

Sead Presentation

The audience came from a wide range of industries and were encouraged to remember the passion that encouraged them to join the industry as innovators in their companies, showing them how to use technology to grow their companies, solving business problems, improving efficiencies and increasing productivity and profit.

Covering topics including the latest Gartner Hype Cycle predictions, Location and Proximity Based Marketing, Check In Marketing, Mobile Computing, QR Codes, Business Intelligence using maps and the hot topic of the use of personal devices in a corporate market, there was something in it for everyone. Case studies illustrated not only practical use of technology, but professional processes to ensure that projects were well designed for success.

The presentation outlined the ongoing chasm between people in the ICT profession and their colleagues when it came to understanding and use of new technologies, particularly mobile and location based. Luigi encouraged the audience ranging from consultants to CIO’s to consider how they can educate and encourage their companies to understand the new technologies and how they fit into their business frameworks. There are great opportunities for IT people to be welcomed back into the boardroom by working closely with the management team to show them how to implement and benefit from new technologies, safely and securely.

Luigi and the Sead Team at the Mercure

September 5, 2011 Posted by | Auckland, Business Analytics, Business Intelligence, Business Tools, Check Ins, Data Mining, facebook, foursquare, geosmart, GIS, ICT, iphone, location based services, map tools, Mapping Applications, maps, Marketing, new zealand, proximity based marketing, Retail Profit, ROI, territory management, Uncategorized | , , , , , , , , , , , , , , | Leave a comment

Proximity Based Marketing and LBS is a Growth Opportunity

I’ve mentioned in previous blogs that traditional forms of Advertising are shrinking. There are many statistics backing this up. There are many statistics backing this up and in Asia Pacific, Carat, for example have forecast a 5.8% decline in ad spend for this year. Obviously the economy is a factor in this result, but it also signals a change in advertising behaviour as people are paying less attention to traditional forms of advertising. Many people now have products such as MySky and Tivo is almost here. These products make it very simple for people to avoid watching TVC’s because the can fast forward their recorded TV programmes. TVNZ announced that they were laying off 90 people as a consequence of a $25 million reduction in advertising revenue. The same applies with radio where many people are now opting for their iPods to listen to their favourite music instead of tuning in and being forced to listen to radio ads.

In my opinion, this doesn’t mean that people want to avoid advertising, specials and promotions altogether. They want them to be more relevant. ZenithOptimedia have forecast far greater drops in Ad expenditure, 11% drop in magazines, 10% in radio, 5.5 in TV, but around a 10% increase in Internet Advertising. So traditional forms of advertising decline, but Internet advertising is on the rise.

Why would that be? People are using the Internet far more these days, which takes them away from traditional media, but the key element to me is relevance. In the World Wide Web, it is far easier to ensure that advertising is relevant to the search or type of site that people are visiting. It also offers a great opportunity for call to action with Click Through, which is of course where Google makes the bulk of its income.

The ability to have people opt in to various services that are relevant to their interests and needs, their current time and place means that the offers will be welcomed and will have a far greater sales conversion rate than with traditional means of advertising and promotion. This is where the opportunity arises with Location Based Services (LBS) and Proximity Based Marketing.

The issue isn’t that people hate ads, specials, good deals and information. The relevance needs to be around space and time. I would welcome a Speight’s Mates Happy Hour electronic coupon, when I am walking past a bar, with a 2 for 1 offer on a Friday evening after work. But I probably wouldn’t even see a printed coupon in a magazine.

I’m sure tourists would take advantage of a special offer to a half price jet boat ride when they are on holiday in Queenstown, when they are within a kilometre of the boat on a sunny morning, than if they read an ad in the plane on their way to New Zealand. The tour operator gets a full boat and all the passengers have more fun. It’s timely, its based on their immediate location and its relevant to their current situation.

Many people think that the technology isn’t ready, but according to a story in ITWire, compound growth of GPS in mobile phones is over 49% and one of the major drivers in the proliferation of SmartPhones. According to Mobile Marketing Magazine, despite the economy, the penetration of SmartPhones grew by 33% to February this year. The traditional definition of a SmartPhone comes from Operating Systems such as Palm, Symbian and Windows Mobile, but if you look around today, many of the mobile apps in those phones such as Contacts, Diary, Email, Still and Video Camera are now standard in pretty much every phone and with the low cost of GPS, that is now being added at great speed.

With Software Development Kits being made freely available for the popular brands and models of phone, this is a perfect opportunity to become familiar with the web services and API’s available from GeoSmart and outlined in previous blogs. All you need is a good idea and a little market research. Of course GeoSmart can offer you a Developer Agreement which gives you free access to any tools you need during the development process.

You can find more information on the Developer Page at http://www.geosmart.co.nz or email info@geosmart.co.nz

developer-page1

April 21, 2009 Posted by | Agencies, geosmart, GIS, gps, lbs, location based services, map tools, maps, Marketing, Mobile maps, new zealand, new zealand maps, proximity based marketing, Sales, satnav, Uncategorized, web maps | , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment